There's no shortage of bank deals

Sunday

The Times-Union takes mistakes seriously. We will correct all mistakes of fact made in our news stories as soon as possible. We also publish appropriate clarifications.

"EverBank customers with FreeNet Checking Accounts do not pay a monthly fee unless they have Online Bill Payand their average monthly balance is less than $5,000. Because of a reporter's error, a column on Page D-1 Sunday incorrectly stated the terms of the monthly fee."

After years of running up debt, consumers have shifted into a savings mode.

So if you're using the credit card less and putting more money in the bank, you should shop around for the best interest rates for growing your bank accounts, just as you would weigh competing offers from credit card companies.

That means seeing if your existing bank offers benefits you're missing out on, or taking a look at other banks. There is no shortage of choices, particularly with the Internet giving banks a bigger playing field for attracting customers.

Jacksonville-based EverBank, for instance, regularly shows up in national surveys of high-yield accounts. EverBank has four locations in Jacksonville, but it's among the banks that uses the Internet to compete across the country by advertising its rates.

"Right now, consumers are concentrating on paying down debt and saving money," said Greg McBride, senior financial analyst for Bankrate.com, a Web site that tracks the interest rates offered by financial institutions for a range of products.

He said the key for consumers is understanding the benefits and strings attached to offers from banks seeking to stand out from the pack.

"Finding the right checking account is a lot like finding the right spouse," McBride said. "It's all about compatibility."

He said for most people, the right checking account meets three criteria - there is no monthly fee, no minimum balance requirement, and no restriction on the number of transactions. In essence, it should be a free checking account. People can think of their checking accounts the same way as filling the gas tank of a car - pump money into the checking account to cover payment of bills, and when the account goes down, put more money in to cover upcoming expenses.

To go a step further and earn money from your checking account, find out what the annual percentage yield is for your account. The APY calculates how much money you would earn over 365 days. It takes into account compound interest, which is interest earned on your interest. If you have 1 percent APY on $1,000, it would earn $10 after a year, a 1.5 percent APY would earn $15, a 2 percent APY would net $20, and so on.

Some Northeast Florida banks offer reward checking with high yields. For instance, First Atlantic Bank has a Treasure checking account that earns 4 percent APY on balances up to $30,000. Atlantic Coast Bank has High Tide Rewards Checking with 3.5 percent APY on balances up to $25,000.

At both banks, there is a minimum $100 deposit to open the accounts and no minimum balance thereafter or monthly fees.

However, there are some requirements to get the high yield. Customers must use their debit cards at least 10 times each month, they must sign up for electronic statements, and they must make a direct deposit or direct debit each statement cycle. A direct debit would be an electronic payment of a bill.

McBride said banks offer reward checking to build customer loyalty because a customer who regularly swipes the bank's debit card is less likely to leave for another bank.

"It's something that cements that relationship," he said. "It's something that will have some staying power."

If you're someone who turns to a debit card frequently for purchases, a reward checking account can be a good deal. But if you don't hit the minimum requirement, the yield will fall sharply that month. At Atlantic Coast Bank, your earnings will drop to 0.25 percent APY that cycle, and at First Atlantic Bank, it will be 1 percent APY.

EverBank uses a different model for its FreeNet Checking Account. It doesn't require a minimum amount of debit card usage, or cap the amount of balance that will get the higher yield. Instead, the opposite dynamic occurs - the higher the balance, the better the earnings for the customer.

It does require a minimum opening deposit of $1,500. If the average monthly balance is less than $5,000, the customer is charged an $8.95 fee.

To attract new customers, EverBank offers 3.01 percent APY for the first three months on their deposits. After that, the APY drops and is determined by the size of the customer's account. For instance, a customer with less than $10,000 in the account would have a first-year APY of 1.52 percent, while a customer with more than $50,000 would get a 1.96 percent APY.

This kind of account could be desirable for someone who wants to roll their savings and checking into a single account, said Frank Trotter, president of EverBank Direct, which is a division of EverBank Financial Corp. They could keep the balance high enough to earn interest on the money and be able to tap it as a checking account.

Another factor to consider in choosing a checking account is how often you make ATM withdrawals. If you do that frequently, then the convenience of a bank with lots of ATM locations could make a difference. You can avoid the expense of paying ATM fees for using other banks' machines.

Some banks will offer customers reimbursement for ATM fees charged by other banks, but the amount of reimbursement will be capped at a dollar amount each month.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.

Stay Connected

Original content available for non-commercial use under a Creative Commons license, except where noted.
The St. Augustine Record ~ One News Place, St. Augustine, FL 32086 ~ Privacy Policy ~ Terms Of Service